A substantial percentage of personal and business financial transactions are carried out by the use of credit. When one has established an acceptable line of credit, the use of credit to finance a transaction is a rudimentary procedure. However, in order to grant a person or business credit, a number of factors must be found to be acceptable. These factors are generally gleaned from an accumulation of information about the consumer desiring to establish credit. A database of the accumulated consumer credit information has historically been maintained by the consumer credit reporting industry.
An example of the chain of events that occurs in obtaining credit sufficient for paying for goods and services is as follows. A consumer seeking to establish credit with an institution, such as a retail store, fills out an application for credit. Application forms generally request that the consumer provide all types of personal and historical information concerning his/her finances, employment history, and other information unique to the person. The institution then uses the personal identifying information from the application form and makes a request with a consumer reporting agency to provide a credit report on file for the consumer, if such a file exists. The consumer credit information stored by the consumer reporting agency in relation to the consumer is transferred to the institution for analysis to determine if the consumer is worthy of credit. If the consumer does not have credit considered to be sufficient, then the consumer is denied credit by the institution. On the other hand, if the consumer has a history of sufficiently good credit, then credit may be extended by the institution.
Computer automation in the consumer credit reporting industry began in the 1960's and continued to expand within the industry in the 1970's. This change to the automation or computerization of consumer records and the procedure in the consumer credit reporting industry revolutionized the way information was gathered, processed, and accessed, not only by the consumer reporting agencies, but also by the institutions that purchased the consumer reports and related services.
Prior to this time of automation, the activities of building, maintaining and providing consumer credit information was a manual and labor intensive process. Many of the records were of the paper or documentary form, and thus the generating, updating and correction of the same was an onerous task. Even the early computerized systems were very limited in speed, storage capacity and the number of requests that could be processed per unit of time. As the credit reporting industry evolved, the procedures for obtaining consumer credit information has become more complicated, as has the type and amount of information available. In addition, many safeguards must be built into the consumer reporting database to assure that the data is not only accurate, but that the consumer credit information is provided only to the appropriate institutions or individuals. The fraudulent procurement by one party of another's credit information can lead to substantial monetary losses, as well as damage to the other party's credit.
Building a consumer reporting database required multiple processes to be executed in order to achieve the basic goal of establishing a “file” for each credit active consumer, and to periodically add existing credit account information for each consumer to the consumer's file. One process that was employed to build a consumer reporting database was the solicitation of past and current credit account information from institutions. With each credit account reported by the institution to the consumer reporting agency, either the newly-reported credit account would be added to the database file of an existing consumer, or the newly-reported credit account would be used to build a new file for a consumer who did not previously have a database file.
Another process in building a consumer reporting information database was the gathering of public record data from courthouses. Each segment of a public record associated with consumer credit information would be either added to an existing consumer's file, or would be used to establish a new file when that consumer did not previously have a database file.
As the computer automation of records and procedures began to grow in the consumer credit reporting industry, the basic goals for building a consumer information database remained, but many of the methods changed. Institutions began reporting credit account information by way of computer tapes. Consumer reporting agencies would process the tapes and either add the credit account information to an existing consumer's file in the computerized consumer information database, or created a new file for that consumer if no file previously existed in the computerized consumer information database.
The method for requesting and receiving consumer information from institutions also changed dramatically. Prior to computer automation, the exchange of consumer credit information between the consumer credit reporting industry and the institutions took place verbally by way of telephone conversations. After computer automation, the institutions began to electronically access consumer reports with computer terminals. The computerized consumer reporting systems employed programs that permitted the institutions to data enter information uniquely identifying the consumer. This unique information obtained from a credit application filled out by the consumer was entered into the computer terminal to request and receive a credit report associated with the consumer applying for credit. These computer programs limited the amount of application information that could be provided by the institution in the request for a consumer report. The application information was generally limited to personal identification, such as name, address, date of birth, social security number, telephone number and employment information.
More recently, consumer reports are purchased electronically, but the vast majority are not accessed from computer terminals operated by the computerized consumer reporting systems. Institutions purchasing consumer reports frequently data enter all of the information on the applications into their own computerized application processing systems. The use of such application information is for internal purposes of the institution, and is not reported or made available to consumer reporting agencies.
These computerized application processing systems of the institutions are adapted for electronically transmitting requests to the computerized consumer credit reporting systems for obtaining consumer reports. While the application information is available and accessible by the institution in its computerized application processing systems, only limited information that personally identifies the consumer, and his or her employment information, is transmitted to and integrated into the database of the computerized consumer credit reporting systems.
Application information is personal data about a person consisting of, but not limited to, information such as name, address, phone number, place of employment, marital status, number of dependents, and income. Other types of application information may include additional personal data related to assets, liabilities, personal property, debt, and other contacts the person may have.
Application information is provided to institutions by persons seeking something of value. Institutions use the application information as one of the tools in making positive identification of the person to whom the institution is providing something of value.
However, there are situations that occur where a person's identity information is stolen and used by other persons for fraudulent purposes in order to gain material wealth for themselves.
Identity theft has become one of the fastest growing crimes across the country, according to many law enforcement agencies. In the course of a day, persons fill out applications for home loans, cell phones, credit cards, apartment leases, and a host of other things, so that they can enjoy both the necessities and the luxuries of life. Many do not realize how much personal information is passed on to total strangers who may use and abuse it for their personal gain, that is, steal someone's personal identity information to secure goods and services for themselves and, perhaps, sell the ID to others for their personal gain.
Identity theft started with thieves trying to steal “wallet-type” information, i.e., name, address, social security number, credit cards and more. The thief would use the information to contact a person's credit card issuer and change the mailing address so that charges could be run up and the bills would be sent to a new address and never paid until months had passed and thousands of dollars had been charged to the credit card.
Identity thieves obtain personal information in several other ways also: from trash dumpsters, by posing as someone they are not to get information, by illegally obtaining credit reports on persons, and by buying information from “inside” sources.
Identity protection systems worked to try and provide security for victims whose ID was stolen by using picture IDs and some forms of electronic verification, but it was not enough, as thieves continued to find ways to steal the basic identification information. As a result, persons who have their identities stolen spend months or years, and thousands of dollars, cleaning up the problems created by identity thieves, not to mention the embarrassing phone calls and letters they receive from collectors telling them they owe money and that they are seriously past due.
The effects of identity theft are felt in virtually every industry in the business world-banking, telecommunications, computers, and many others. There is a very large need for a method that would provide even greater protection for both persons and the institutions with which the persons conduct business. One such method would compare application information from a person seeking something of value from an institution, to a database containing application information compiled and stored from other institutions in order to test the validity of new application information. This technique would provide the institutions with a method for establishing positive identification.
From the foregoing, it can be seen that a need exists for a technique to build a computerized consumer credit reporting system that is capable of requesting, receiving and storing all of the information that is available on a consumer's application for credit, insurance or employment. Such application information may be used for, but not limited to, applying for credit, insurance, or employment, and verifying that the consumer is who he or she portrays themselves to be.
There is a further need for a technique to store the application information in a manner such that the application information is retained and maintained as clearly identifiable. In other words, the integration of some of the application information into the account data of the consumer does not compromise the integrity of the application information itself. The application information remains clearly distinctive and is maintained separate from the account data of the consumer.
Yet another need exists for storing in the database of the consumer reporting agency not only all of the application information, but also an indication of when and what institution submitted the application information.
A further need exists for reducing instances in which persons use the database information to steal the identity of another person. The application information stored in the database is not available to the public in general, except for a consumer requesting his/her own credit report, and even then the consumer must submit substantial detailed information that matches the detailed information stored in the consumer's application information file.
An additional need exists for a technique for automatically comparing the information submitted by a consumer in an application, with the corresponding stored application information to determine inconsistencies therebetween. When a number of inconsistencies result from the comparison, then the transaction may be tagged as one in which an identity of a consumer is attempted to be stolen.